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Vale is a Brazilian pioneering mining company that is present all over the world. The result of its work can be found in most things from cars to mobile phones, household appliances, computers and construction components.

Vale has caught my attention because it has created the Vale Foundation, an institution that develops social programs to contribute to strengthen regional populations while respecting local cultural identities.

The Vale Foundation, together with other non-governmental organizations, local governments and private companies search for ways to improve the quality of life of the communities wherever they are present. “Rede que Vale” (Vale Network – promotes the development of small business enterprise, through management training and access to loans and capital) is one of these programs and you can check it by clicking here.

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By John Fitzpatrick

Sky-high interest rates are as much a feature of Brazilian life as samba, football and television soap operas and the media constantly reminds us that they are the highest in the world. Well this particular soap opera may be coming to an end with the Central Bank decision on March 11 to slash the base rate by 1.5% to 11.25%. This sudden change would never have occurred had it not been for the international financial crisis. Of course, the rate is still meteoric by international standards and does not reflect the real rate charged by banks but the signs point to further cuts and some analysts are predicting interest rates of less than 10% by the second half of this year. While some economists and sectors have hailed the move, others have been critical and say it was still not enough to prevent Brazil entering a recession this year. To mark the prospect of single-digit rates, which I must confess I had almost never expected to see, Brazil Political and Business Comment and Gringoes.com present the views of a number of economists and business and political leaders.

“The risk still exists of the currency depreciation being passed on in prices which would lead the Central Bank to put its foot on the brake. We are facing a crisis of confidence in which the banks and consumers are becoming more conservative in granting credit regardless of the level of interest rates.”
Mailson da Nobrega, former finance minister and partner of Tendências Consultoria Integrada

“It is reasonable to expect a new cut but the Copom does not want to commit itself to any size. It will need to assess the effects of what it has been doing. What could affect the interruption of the downward trend would be higher inflation. Inflation is expected to come to between 0.34% and 0.35% this month but if it were to reach 0.5% this could be alarming although it is unlikely. At the same time, the Central Bank could show some concern over the recovery in industrial production although this is also unlikely. The rise of the dollar could also have an influence if it reaches R$2.60 in the short term. This would lead to a pass-on effect on prices but the chances of an increase happening now are very small.”
Alexandre Schwartsmann, former Central Bank director and chief economist of Banco Santander

“Interest rates of 11.25 p.a. are still extremely high. Brazil needs a Selic rate of 8% at the maximum. As long as it does not fall to this level we will remain on the wrong path. Industry will start performing much better on the day interest rates reach 7% to 8%. The Central Bank should be acting to achieve this.”
Paulo Skaf, chairman of the Federation of Industries of São Paulo State (FIESP)

“This fall will benefit the consumer who will have a greater volume of credit at lower interest rates as the financial institutions have already announced lower rates. Companies will also gain as they will have a greater supply of credit for investment. Even the government will gain as it will pay less interest on the public debt and have resources available for investment. If the rate falls to a single-digit level in the second half of the year this will be extremely promising for the consumer and the Brazilian credit market as it will boost growth and encourage individuals who are ready to buy and lend although at a lower level,”
Adalberto Savioli, chairman of the National Association of Credit, Financing and Investment Association.

“The next Copom decisions will depend on how the inflation and activity figures perform but these should not prevent new adjustments in the Selic rate. We do not believe the cycle of interest rates cuts will end with today’s announcement. It is extremely likely that the Selic rate will reach a single-digit level by the middle of this year and be maintained to the end of 2009. In principle, we expect the total adjustment will take the rate to 9.75% at the end of the process although we also consider that it may even slightly lower.”
Silvio Campos Neto, chief economist, Banco Schahin

“The Central Bank was braver than usual but its approach will not be enough to rescue the economy from sudden death. I have been critical of the Central Bank for its timidity in reducing the Selic rate in 2006 and 2007 but I can see that since the crisis exploded it has acted in an austere, serious way faced with the danger of the higher dollar being passed on in prices.”
Paulo Rabello de Castro, chairman, RC Consultores

“I think the cut in the Selic rate should have been greater but the fact that the decision was unanimous shows that the members of the Copom are now much closer to reality.”
Marcelo Ribeiro, strategist, Pentágono Asset Management

“This acceleration of the cut in interest rates is still not fast enough for the current moment. The Central Bank is still showing that it is not following the right course to prevent a recession.”
Armando Monteiro Neto, chairman of the National Confederation of Industry and member of the House of Representatives

“The unfeeling technocrats of the Copom have lost a great opportunity to loosen the rope strangling the productive sector which creates employment and income. Unfortunately, once again the government is leaning towards the speculators.”
Paulo Pereira da Silva, chairman of the Força Sindical labor union federation

“The Central Bank took an attitude which was compatible with the sharp downward movement in economic activity we have seen in recent months. At the same time, market expectations for inflation continue to decline and there is still a chance of gasoline prices being cut which would bring an added relief to the indices. A bigger cut of 2% would have come as a surprise and been better received by the market but it might have brought undesirable effects on the interest rate futures curve.”
Rubens Sardenberg, chief economist, the Brazilian Bankers Association

“In principle, we expect the Copom to cut the Selic rate by 150 basis points in April and make a further cut of 100 basis points in July which would take the level to 8.75%. However, we do not rule out the need for new cuts depending on how the external crisis develops and the Brazilian economy performs in the coming months.”
Maristella Ansanelli, chief economist, Banco Fibra

Note: these comments are edited translations from the economists themselves and the following newspapers: Estado de S. Paulo, Folha de S. Paulo, Valor Economico and Gazeta Mercantil.

John Fitzpatrick 2009

John Fitzpatrick is a Scottish writer and consultant with long experience of Brazil. He is based in São Paulo and runs his own company Celtic Comunicaçõess. This article originally appeared on his site http://www.brazilpoliticalcomment.com.br. He can be contacted at jf@celt.com.br.

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butchery Inae Riveras
CHICAGO (Reuters) – At the tender age of 18, when other teenagers dream about
getting a car, Wesley Batista was handed a meat-packing plant to manage. Some 20 years later, the 38-year-old Brazilian runs the U.S. operations of the world’s largest beef producer, Brazil’s JBS  beef group. Like his brother, Joesley, the chief executive officer of JBS, the meat business was in Wesley’s blood.
Both dropped out of college and learned their trade early, following in the footsteps
of their father, Jose Batista Sobrinho, who grew the empire from a butcher shop.
The family-controlled company, based in Brazil’s financial capital Sao Paulo, surprised analysts last year by announcing plans for some major international acquisitions.
The deals included National Beef Packing Co LLC and the beef unit of Smithfield Foods Inc, both in the United States, and the Australian-based Tasman Group.
JBS announced last week it was abandoning plans to buy National Beef, the No. 4
U.S. beef producer, after the Justice Department said some of its plants would have
to be sold. That acquisition would have made it the No. 1 U.S. beef processor, a
jump from its current rank of No. 3.
The company, largely unknown outside of Brazil until a few years ago, originated in
the early 1950s when the elder Batista started buying cows in Goias state in central
Brazil and selling them to meat-packers.
In 1957, he saw an opportunity with the planned construction of Brazil’s new capital
of Brasilia and set up one of the first regional slaughterhouses, with an initial
capacity of just 25 to 30 animals a day.
Starting in the 1980s, JBS aggressively acquired rivals and set up a national chain of plants that reduced sanitary risks and cut reliance on local suppliers, said Jose Vicente Ferraz, technical director at AgraFNP consultancy in Sao Paulo.

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brazil_getty_136521s1Times are tough, so is it worth emigrating? Kate Hughes looks at possible exit strategies

Brazil has an immature and developing market and isn’t exposed to the kind of debts that developed Western countries have suffered from.
The interest on your savings is minuscule, your pension pot has been hammered, and the value of your house is plunging. You might be made redundant – and, to cap it all, we’ve had the coldest winter in 30 years. In short, life in Britain isn’t looking great. This may be a worldwide wipeout, too, but there could be a few safer, if not entirely safe, havens to run to with what’s left of your wealth.
“Very few places have not been affected by the downturn,” says Oliver Watson, regional managing director of international recruitment consultant Michael Page. “But if you are looking for an overseas opportunity, look for a sound gross domestic product [GDP, a country’s input and output] and an economy linked to natural resources. Brazil won’t see stellar growth over the next year, but it should be steady. It has an immature and developing market and isn’t exposed to the kind of debts that developed Western countries have suffered from.”
So far, Brazil has weathered the downturn better than most, but low demand for its exportable products means that the South American country will not escape unscathed. The most up-to-date GDP figures show continued strong growth, but they only go to the end of September last year, and business confidence in Brazil is at a six-year low. Brazil’s economy is taking a hit, but the downturn here may be less severe.

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oil-on-water1By ANDREW DOWNIE, The New York Times
Published: January 24, 2009

SÃO PAULO, Brazil — Brazil’s state-controlled oil company, Petrobras, announced a crisis-busting investment plan Friday to spend more than $174 billion over the next five years, much of it for prodigious deep-water oil and gas exploration.

The investment covers the 2009-2013 period and represents a rise of 55 percent over the $112.4 billion the company had vowed to spend on development between 2008 and 2012.

This investment is “very robust and very important for the continuity of Petrobras’s growth,” José Sergio Gabrielli, the company’s chief executive, told reporters Friday at a news conference in Rio de Janeiro.

Petrobras, whose full name is Petróleo Brasileiro, had promised to unveil its spending plans in September but delayed the announcement several times because of the world’s financial turmoil.

In 2007 and 2008, Petrobras and partners including Repsol YPF of Spain and the BG Group of Britain discovered vast deposits of oil under more than 4,000 meters of water, rock and salt.

Although the finds are at previously untapped depths and will be costly to extract, they hold an estimated 8 billion to 12 billion barrels of oil, according to Petrobras figures. Company officials and oil experts say that other reserves of that size could be nearby.

One of the finds alone, named the Tupi, holds the equivalent of 5 billion to 8 billion barrels of light crude oil and is the world’s biggest new field since a 12-billion-barrel find in Kazakhstan in 2000.

President Luiz Inácio Lula da Silva of Brazil has said repeatedly that developing these oil reserves is vital to the country’s future, and Petrobras has set aside $28 billion to that end.

In all, new drilling could produce 219,000 barrels a day by 2013, 582,000 barrels a day by 2015 and 1.82 million barrels a day by 2020, he predicted.

Natural gas extraction would rise from 7 million cubic meters a day in 2013 to 40 million a day in 2020, the company added.

Petrobras produced a daily average of 2.18 million barrels of oil and gas last year.

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Reuters

EVER since it was first spotted amid the factory smoke of western Europe’s industrialising nations, the middle class has borne the hopes for progress of politicians, economists and shopkeepers alike. It remains hard to define, and attempts to do so often seem arbitrary. But in Brazil, the middle class describes those with a job in the formal economy, access to credit and ownership of a car or motorbike. According to the Fundação Getulio Vargas (FGV), a research institute, this means households with a monthly income ranging from 1,064 reais ($600) to 4,561 reais. Since 2002, according to FGV, the proportion of the population that fits this description has increased from 44% to 52%. Brazil, previously notorious for its extremes, is now a middle-class country.

This social climbing is a feature mainly of the country’s cities, reversing two decades of stagnation that began at the start of the 1980s. Marcelo Neri of FGV suggests two factors behind the change. The first is education. The quality of teaching in Brazil’s schools may still be poor, but those aged 15-21 now spend on average just over three more years studying than their counterparts did in the early 1990s.

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